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Effect of assumption of control under section 35

Finance Companies Act 1967

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—(1) Upon assuming control of the relevant business of a finance company, the Authority or statutory manager (as the case may be) must take custody or control of the relevant business.(2) During the period when the Authority or statutory manager is in control of the relevant business of a finance company, the Authority or statutory manager —(a)must manage the relevant business of the finance company in the name of and on behalf of the finance company; and(b)is deemed to be an agent of the finance company.(3) In managing the relevant business of a finance company, the Authority or statutory manager —(a)must take into consideration the interests of the depositors of the finance company; and(b)has all the duties, powers and functions of the members of the board of directors of the finance company (collectively and individually) under this Act, the Companies Act 1967 and the constitution of the finance company, including powers of delegation, in relation to the relevant business of the finance company; but nothing in this paragraph requires the Authority or statutory manager to call any meeting of the finance company under the Companies Act 1967 or the constitution of the finance company.(4) Despite any written law or rule of law, upon the assumption of control of the relevant business of a finance company by the Authority or statutory manager, any appointment of a person as the chief executive or a director of the finance company, which was in force immediately before the assumption of control, is deemed to be revoked, unless the Authority gives its approval, by written notice to the person and the finance company, for the person to remain in the appointment.(5) Despite any written law or rule of law, during the period when the Authority or statutory manager is in control of the relevant business of a finance company, except with the approval of the Authority, a person must not be appointed as the chief executive or a director of the finance company.(6) Where the Authority has given its approval under subsection (4) or (5) to a person to remain in the appointment of, or to be appointed as, the chief executive or a director of a finance company, the Authority may at any time, by written notice to the person and the finance company, revoke that approval, and the appointment is deemed to be revoked on the date specified in the notice.(7) Despite any written law or rule of law, if any person, whose appointment as the chief executive or a director of a finance company is revoked under subsection (4) or (6), acts or purports to act after the revocation as the chief executive or a director of the finance company during the period when the Authority or statutory manager is in control of the relevant business of the finance company —(a)the act or purported act of the person is invalid and of no effect; and(b)the person shall be guilty of an offence.(8) Despite any written law or rule of law, if any person who is appointed as the chief executive or a director of a finance company in contravention of subsection (5) acts or purports to act as the chief executive or a director of the finance company during the period when the Authority or statutory manager is in control of the relevant business of the finance company —(a)the act or purported act of the person is invalid and of no effect; and(b)the person shall be guilty of an offence.(9) During the period when the Authority or statutory manager is in control of the relevant business of a finance company —(a)if there is any conflict or inconsistency between —(i)a direction or decision given by the Authority or statutory manager (including a direction or decision to a person or body of persons referred to in sub‑paragraph (ii)); and(ii)a direction or decision given by any chief executive, director, member, executive officer, employee, agent or office holder, or the board of directors, of the finance company,the direction or decision mentioned in sub‑paragraph (i) prevails over the direction or decision mentioned in sub‑paragraph (ii) to the extent of the conflict or inconsistency; and(b)a person must not exercise any voting or other right attached to any share in the finance company in any manner that may defeat or interfere with any duty, function or power of the Authority or statutory manager, and any such act or purported act is invalid and of no effect.(10) Any person who is guilty of an offence under subsection (7) or (8) shall be liable on conviction to a fine not exceeding $20,000 or to imprisonment for a term not exceeding 3 years or to both and, in the case of a continuing offence, to a further fine not exceeding $2,000 for every day or part of a day during which the offence continues after conviction.(11) In this section, “constitution”, in relation to a finance company, means the memorandum of association and articles of association of the finance company.

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